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We poll the world's leading economists and compile over 2,000 individual macroeconomic forecasts to provide our clients with reliable data and analysis for 127 countries. Our reports feature the Consensus Forecast (mean average), along with best- and worst-case scenarios.

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Global growth stabilizes in Q2

In the second quarter, the global economy maintained the same pace of growth as in the previous two periods. Stronger economic dynamics in advanced economies continued to compensate for weaker activity in the emerging market economies. According to preliminary estimates, the global economy expanded 2.6% annually in Q2, which was in line with the results tallied in Q1 (previously reported: +2.5% year-on-year) and in Q4. Growth in developed nations was underpinned by healthy dynamics in the Eurozone as the economic recovery continues to gain traction. Japan also contributed positively to global growth due to steady gains in wages and renewed business confidence. Among the major developing economies, while growth in both China and India was broadly stable in Q2, economic conditions remained soft in Brazil and Russia.

Economy loses strength in Q1, but dodges contraction

Worsening economic conditions in Brazil and Venezuela hit Latin America’s economic growth in the first quarter of 2015. A GDP growth estimate showed that the region’s economy decelerated sharply in the first quarter after having accelerated in the fourth quarter of 2014. Nonetheless, Latin America’s economy avoided a contraction at the outset of year. The region’s GDP fell from a 0.8% expansion in Q4 2014 to a revised 0.1% increase in Q1 2015 (previously reported: -0.5% year-on-year). The economy avoided a contraction in Q1 mainly due an expansion in Argentina (Q1:+1.1% yoy; Q4: +0.5% yoy); the region’s economic growth was dragged down by a contraction in Brazil (Q1: -1.6% yoy; Q4: -0.2% yoy) and a disastrous plunge in Venezuela (Q1: -7.0% yoy; Q4: -2.8% yoy). Although Venezuela has not released official GDP data since Q3 2014, analysts believe that the economy is spiraling into a deep crisis.

Region’s GDP outperforms expectations in Q1

More complete data show that the majority of the economies in Central America performed better than expected in the first quarter, despite a sharp deceleration in the United States, lower commodities prices and a harsher business climate in the region. According to recent data, the economies of Belize, El Salvador and Honduras gained momentum in the first quarter. Moreover, major players in the region also performed relatively well at the outset of the year. The Guatemalan economy accelerated in the first quarter and the economies of the Dominican Republic and Panama maintained virtually the same pace of expansion as in the fourth quarter of 2014. The exception was Costa Rica, whose economy decelerated.

Growth fails to pick up in Q2 on weak regional economic conditions

Growth in the Association of Southeast Asian Nations (ASEAN) moderated slightly in the second quarter of the year according to preliminary results. GDP expanded 4.5% annually in Q2, which was a tad below the 4.6% increase tallied in Q1. Moreover, the pace of growth was weaker than the 4.8% increase that was projected last month. Results of note in the second quarter include a sizeable year-on-year slowdown in Singapore, with manufacturing continuing to be the weakest link due to rising wages and weak exports to China, the Eurozone and the United States. Conversely, in Vietnam, GDP expanded robustly due to strong dynamics in the industrial sector, which is benefiting from cheap labor costs and a further opening of the economy. Elsewhere in the region, the manufacturing sector remains depressed in Indonesia and Thailand, while in Malaysia the external sector continues to disappoint mainly due to low oil prices and weak external demand. That said, private consumption is expected to have supported growth in Q2 along with stronger dynamics in the United States.

Economic activity stabilizes in Q2 as China holds up well

Growth in the East and South Asia (ESA) region was likely broadly stable in Q2 according to a preliminary set of data. GDP is expected to have expanded 6.4% annually in Q2, which is on par with the 6.4% increase tallied in Q1. The still robust growth observed in the second quarter mainly reflected the fact that the Chinese economy held up relatively well in the April–June period, expanding 7.0% over the same period of last year. The result was up 0.2 percentage points from what FocusEconomics Consensus Forecast panelists had projected the month prior. China benefited from healthy dynamics in the tertiary sector, particularly in the financial sector, while growth in the secondary sector—which includes manufacturing and construction—continued to slow. Elsewhere in the region, recent data suggest that the economic recovery in India is on track, mainly due to higher disposable income, strong investment in infrastructure and looser credit conditions. Conversely, weak exports and the outbreak of Middle East Respiratory Syndrome (MERS) likely took a toll on the Korean economy in Q2.

Eurozone economy is still resilient, Greece is not out of the woods yet

Uncertainty in relation to Greece caused a great deal of negative news for the Eurozone in the second quarter, but data suggest that economic growth in the common-currency block was resilient in the period. Although industrial production decreased in May—mainly due to the volatile electricity sector—manufacturing production picked up pace, with output of both durable consumer goods and capital goods showing a notable increase over the previous month. In terms of labor market developments, the number of people unemployed in the Eurozone continued to fall in May, maintaining the unemployment rate at 11.1%, which is the lowest level that has been registered in three years. An important point to underline is the large dichotomy in labor market dynamics that still persists among some Eurozone economies. While the harmonized unemployment rate in Germany, Malta and Luxembourg are at just 4.7%, 5.6% and 5.7%, respectively, in Greece (25.6%, April data), Spain (22.5%) and Cyprus (16.0%) it remains well above the regional average. That said, the latest leading indicators are showing the first signs of the impact of the Greek crisis: the economic sentiment indicator took a mild hit and fell in June, and the flash composite PMI declined in July after the indicator had climbed to a four-year high in June.

Region’s economy gains momentum in Q1

Growth in Central and Eastern Europe (CEE) decelerated considerably toward the end of 2014, mainly due to the impact of external factors resulting from the geopolitical crisis in Ukraine. However, the majority of the CEE economies are starting to benefit from the nascent recovery in the Eurozone and accelerated notably at the beginning of the year. According to more complete data, GDP growth in 7 of the 11 economies surveyed increased at rates between 2.0% and 4.5% in Q1. The Czech Republic and Romania led the pack, growing 4.0% and 4.3% year-on-year, respectively. The economies of Bulgaria, Hungary, Poland, Slovakia and Slovenia also gained healthy momentum in Q1. Croatia’s economy grew just 0.5% in Q1, yet this did represent a mild acceleration over the 0.2% expansion observed in Q4 2014. Conversely, all three Baltic economies registered more moderate growth in Q1 as they are feeling the impact of deteriorating economic conditions in Russia and the effects of the ongoing conflict in Ukraine.

South-Eastern Europe’s economy sustains growth momentum in Q1

Economic growth in South-Eastern Europe (SEE) increased toward the end of 2014 and the momentum carried over into the first quarter this year. A GDP growth estimate for the region showed that the economy increased 2.0% year-on-year in Q1, which matched the expansion seen in Q4 2014. Although severe floods notably affected the economies of Bosnia and Herzegovina and Serbia last year, the region’s economy showed considerable resilience as the majority of SEE economies benefited from low oil and energy prices as well as from the gradual economic recovery in the Eurozone. Growth momentum in SEE in Q1 was mainly supported by economic accelerations in Bulgaria, Croatia, Macedonia and Romania. In addition, Cyprus contributed to the region’s growth as its economy exited recession in the first quarter. Conversely, economic growth in Turkey—the region’s economic powerhouse—moderated at the beginning of the year. The Turkish economy, which remains trapped in the crossing currents of diverging monetary policies in the Eurozone and the U.S., softened from a 2.6% increase in Q4 to a 2.3% expansion in Q1.

CIS economy contracts in Q1 primarily due to recession in Russia

Worsening economic conditions in Russia and lower oil prices have hit the economies of the Commonwealth of Independent States (CIS) in the first quarter of 2015. The beginning of the recession in Russia in Q1 had a substantial impact on the majority of CIS members, since these economies maintain strong links with Russia through trade, financial services and remittances. The economies of Azerbaijan and Kazakhstan are heavily dependent on oil for both exports and fiscal revenues, while the CIS currencies also felt the high volatility that many emerging market currencies experienced at the beginning of 2015. Lower oil prices and heightened uncertainty regarding Russia’s economic situation prompted monetary policy makers in Azerbaijan, Kazakhstan and Turkmenistan to devalue their respective currencies. These economies’ monetary authorities also noted that further adjustments are likely to be necessary.

Growth in the Middle East and North Africa moderated sharply at the outset of the year according to a more complete set of data. GDP expanded 2.7% annually in Q1, which was below the 3.2% increase tallied in Q4. The deceleration observed in the first months of the year mainly reflected disappointing growth in the United States, low oil prices and regional geopolitical threats. In fact, the majority of the economies in the region posted a slowdown in Q1, with the most notable exception being Saudi Arabia. The Kingdom benefited from resilient dynamics in the non-oil sector and lavish spending. That said, as oil prices are levelling off at around 60 USD per barrel, analysts expect that Saudi authorities will start to contain capital spending in the months to come, thereby hurting growth.

Growth in the Sub-Saharan Africa region slowed at the start of the year according to preliminary data that account for around 75% of the region’s nominal GDP. The economy grew 3.5% annually in Q1, which was down from the 4.4% expansion recorded in Q4. Low commodity prices, the weakening of most of the regional currencies and financial market turbulences in some countries were behind the slowdown. The only bright spot was South Africa, which experienced an acceleration in year-on-year terms in Q1, although the expansion did partially reflect a low base of comparison from last year. Economic activity in Kenya, despite having moderated slightly, remained robust in Q1. Data for the first quarter reinforced the notion that the countries that are more exposed to global commodity price swings are feeling the brunt of the pain, while those that are more reliant on domestic demand are weathering the current soft patch relatively well.

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